Coursera begins to make money

Submitted by Ry Rivard on April 8, 2013 - 3:00am

PHILADELPHIA -- Coursera, the increasingly popular provider of free online courses, is beginning to make money.

The Silicon Valley-based company brought in $220,000 in the first quarter after it started charging for verified completion certificates[1], its co-founders said. The company also receives revenue from an Amazon.com affiliates program[2] if users buy books suggested by professors.

“It’s the beginning of revenue,” said a Coursera co-founder, Daphne Koller.

The company has 3.2 million registered users, an increase of nearly 700,000 from mid-February. The company was founded in fall 2011 by Koller and her colleague at Stanford University, Andrew Ng.

The vast majority of users are just dropping in to take free courses, but the company introduced a “Signature Track”[3] to try to put more weight behind the end-of-course awards issued by universities that offer courses through its platform. Users who pay for this have to submit a photo ID of themselves to the company and are also tracked based on their “unique typing pattern” to ensure that people who take tests or turn in assignments are who they say they are. Prices are set around $50 so far.

The company remains interested in keeping courses free, Koller said. That’s how the company took off in the first place, as one of the top providers of massive open online courses, or MOOCs. But a free course does not mean a free end product, so the company is looking at commercializing its certificates. It suggests[4] users can put Signature Track certificates on their resumes as "professional development" or "additional coursework." Coursera is committed[5] to only offering courses from elite universities.

Ng said he had threatened to hold back the project unless the company found some way to offer financial aid to users who could not afford even the relatively small fees the company is charging.

The company hosted a conference on Friday and Saturday at the University of Pennsylvania. More than 400 representatives from the company’s 62 partner universities attended, conference organizers said.

While MOOCs as a whole have rather abysmal completion rates, Koller said paid Signature Truck users with “skin in the game” are finishing its courses, which basically operate on the same business model as any other online course.

During one panel at the Penn conference, Coursera’s software engineer Chuong (Tom)[6] Do showed a bar graph that indicated 70 or 80 percent of paid users are finishing courses.

Do, like others,[7] also urged higher education officials not to put too much emphasis on a standard completion rate that simply measures users who finish MOOCs against users who sign up.

“When we talk about completion rate, there’s one thing we forget to account for,” he said, “and that’s student intent.”

Some users never plan to finish the course and some are just signing up to watch lectures and look at material rather than to take quizzes, he said.

Coursera's intentions are closely watched, particularly as California lawmakers look to outsource[8] some courses to private providers, but Coursera's champions say there is nothing wrong with making a buck and expanding access at the same time.

During an interview, Price said Penn and Coursera’s goals may not align exactly, but they align enough to work together. He said Penn needed to begin preparing for a future wherein education is increasingly delivered by computer.

With Coursera doing the legwork, the university was able to quickly jump in the game because Coursera essentially underwrote Penn’s effort.

“This, the project, became an accelerator to galvanizing interest and generating interest across the campus,” Price said.